Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Saturday, March 15, 2008

Central American Competition Bulletin

Posted by D. Daniel Sokol

The first edition of the Central American Competition Bulletin is now out.  This Bulletin is the effort of the staff members of the Central American Competition Authorities.

Download 1a20edicic3b3n2020boletc3adn20ca20205mar082020ingles.pdf

March 15, 2008 | Permalink | Comments (0) | TrackBack (0)

Friday, March 14, 2008

Competition Law And Patents

Posted by D. Daniel Sokol

Out this month from Edward Elgar Publishing is Competition Law And Patents by Irina Haracoglou.

SUMMARY: Within the broad context of the relationship between intellectual property rights and competition law, this book takes the example of research tools in biopharmaceutical research and innovation to examine the complexities of this relationship, and the ways in which the balance is struck between these two fundamental policies of law. It addresses a question that is certain to become paramount in other industries also: how to strike the balance between initial and follow-on innovation so as to ensure that access to ‘essential’ research tools (or other fundamental elements to follow-on innovation) is not impeded.

Contents: Preface Part I: The Problem – Access as a Necessary Element of Follow-on Innovation? 1. Biopharmaceutical R&D: The Increased Importance of Cumulative Innovation and Related Concerns Part II: The Patent Balance and Working Solutions in the Patent System 2. The Patent System as a System of Balancing 3. The Patent System and Some Potential Safety Nets 4. The Right to Health as an Interpretive Principle of Patent Law Part III: Antitrust as a Complement to the Patent System 5. Unilateral Conduct, Intellectual Property Rights and Competition Law: A Systems’ Interaction 6. The Duty to Deal under Art. 82 EC Part IV: A More Innovation Sensitive Approach to the Interface of Competition Law and Patents? 7. The Duty to Deal as Applied to Address Technology Access Problems in the Biopharmaceutical Industry Bibliography Index

March 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Latest on Efforts to Reform Mexico's Competition Law

Posted by D. Daniel Sokol

Efforts are underway by Mexico's Comisión Federal de Competencia (CFC) to reform Mexican competition law to give it more teeth.  The CFC is pushing for greater sanctions against anticompetitive behavior with penalties based upon 15% of total annual sales in case of collusion and 9% of total annual firm sales in case of non-collusive anticompetitive behavior. The latest news from the Mexican legislative is that these suggested reforms must wait to further analysis, which is seen as a setback.

HT: Professor Ramiro Tovar Landa of ITAM, who testified in favor of including a market affected from the relevant market analysis instead of total sales as criteria to fines before Mexico's Congress.

Download inic_art_35_lfce_dip_sanchez_camacho_prd.doc Download FINALReservaII1.doc

March 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Antitrust Handbook for Franchise and Distribution Practitioners

Posted by D. Daniel Sokol

The new Antitrust Handbook for Franchise and Distribution Practitioners is out.

SUMMARY: Organized by issue--pricing and advertising, customer and territorial restrictions, exclusive dealing, purchasing constraints, and joint franchisee action--to enhance its usefulness to practitioners, this book will prove an invaluable aid to practitioners advising clients on antitrust issues involved in franchising, whether they are selling through a business format or product distribution franchise.

Chapter I offers an introduction to and overview of the antitrust laws.
Chapter II looks at pricing issues, from resale price maintenance, to cooperative advertising, to price discrimination.
Chapter III considers territorial and customer restrictions.
Chapter IV reviews exclusive dealing and exclusive appointments.
Chapter V addresses tying issues and vendor rebates.
Chapter VI provides an overview of the antitrust law applicable to joint conduct by franchisees.

In addition, the application of antitrust law to business format franchises in particular has given rise to a specialized body of law within general antitrust jurisprudence to the extent, for example, franchisors have required franchisees to purchase from designated sources. Those developments are described in detail in this volume.

March 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Thursday, March 13, 2008

The Decision of the Commission to Fine Microsoft €899 millions for Non-Compliance With Its 2004 Decision: A Discussion on Procedure and Substance

Posted by D. Daniel Sokol

The College of Europe's Global Competition Law Centre will host a talk The Decision of the Commission to Fine Microsoft €899 millions for Non-Compliance With Its 2004 Decision: A Discussion on Procedure and Substance on March 19.

March 13, 2008 | Permalink | Comments (0) | TrackBack (0)

Behavioral Economics and the Federal Trade Commission

Posted by D. Daniel Sokol

Former FTC economist Joseph P. Mulholland of Westport63 Consulting has posted the interesting Behavioral Economics and the Federal Trade Commission.

ABSTRACT: This paper discusses the relevance of behavioral economics to consumer protection policy, especially to that practiced at the U.S. Federal Trade Commission. It finds that a good deal of the decision-making approach utilized at the Commission - as guided by the conventional economic model based on neoclassical principles - fits under the broad framework of what is commonly referred to as behavioral economics. This is especially so in regard to the primacy given to determining how consumers utilize information in the formulation of consumer policy. As a result, the contribution of behavioral economics to consumer protection policy has so far been quite limited. Its impact on future consumer policy will most likely come through improvements in empirical methods used to analyze the behavior of consumers, and in the development of ways to communicate more effectively with them.

March 13, 2008 | Permalink | Comments (0) | TrackBack (0)

AAI Summer Conference - The Next Antitrust Agenda

Posted by D. Daniel Sokol

The American Antitrust Institute's newsletter (see below) provides registration details about their June 18-19 conference "The Next Antitrust Agenda", which will focus on antitrust priorities for the next administration.

Download AAI2008_NewsletterFINAL.pdf

March 13, 2008 | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 12, 2008

Call for Nominations for the Jerry S. Cohen Award for Best Antitrust Scholarship of 2007

Posted by D. Daniel Sokol

From AAI:

Wanted - The Best Antitrust Scholarship of 2007: Call for Nominations

The Jerry S. Cohen Memorial Charitable Trust is again seeking nominations for its annual award for best antitrust scholarship. Legal, economic, and business articles, monographs, and books published during 2007 are eligible for this award of approximately $8,000-9,000. The Award will be presented during the American Antitrust Institute Annual Conference at the National Press Club on June 19, 2008 in Washington, D.C.

Although the Cohen Award's judges search the literature for worthy scholarship, your nominations, including self-nominations, will help make sure they do not accidentally overlook any important candidates.

The award is made through a trust set up in the memory of antitrust attorney and author Jerry S. Cohen, brought about by efforts and donations of friends, colleagues and his former law firm. This year's award will be selected by a committee consisting of Professors John Flynn, Eleanor Fox, and Warren Grimes; antitrust practitioners Daniel Small and Charles Goodwin; and Judge Ann Yahner. Last year's winners were Professors Lawrence Sullivan and Warren Grimes for “The Law of Antitrust:  An Integrated Handbook” (2nd Ed. 2006). Previous winners include Barry Nalebuff for "Exclusionary Bundling," Professor Andrew Gavil for "Exclusionary Distribution Strategies by Dominant Firms: Striking a Better Balance," Professor John Connor, for "Global Price Fixing," and Professors Joseph F. Brodley, Patrick Bolton, and Michael H. Riordan for "Predatory Pricing: Strategic Theory and Legal Policy."

To be considered eligible and selected for the award, submissions should reflect a concern for principles of economic justice, the dispersal of economic power, the maintenance of effective limitations upon economic power or the federal statutes designed to protect society from various forms of anticompetitive activity.  Submissions should reflect an awareness of the human and social impacts of economic institutions upon individuals, small businesses and other institutions necessary to the maintenance of a just and humane society--values and concerns Jerry S. Cohen dedicated his life and work to fostering.  Submissions may address substantive procedural or evidentiary matters that reflect these values and concerns.

Please send a copy of your nomination before March 15, 2008 to Herbert E. Milstein, at hmilstein@cmht.com, or at Cohen, Milstein, Hausfeld & Toll, P.L.L.C., 1100 New York Avenue, N.W., West Tower, Suite 500, Washington, D.C. 20005. If you have any questions about the Cohen Award, please contact Herbert E. Milstein, at 202-408-4600 or at hmilstein@cmht.com.

March 12, 2008 | Permalink | Comments (0) | TrackBack (0)

Profit Neutrality in Licensing: The Boundary between Antitrust Law and Patent Law

Posted by D. Daniel Sokol

Stephen M. Maurer and Suzanne Scotchmer both of Berkeley's Goldman School of Public Policy address Profit Neutrality in Licensing: The Boundary between Antitrust Law and Patent Law.

ABSTRACT: We address the patent/antitrust conflict in licensing and develop three guiding principles for deciding acceptable terms of license. Profit neutrality holds that patent rewards should not depend on the rightholder's ability to work the patent himself. Derived reward holds that the patentholder's profits should be earned, if at all, from the social value created by the invention. Minimalism holds that licenses should not be more restrictive than necessary to achieve neutrality. We argue that these principles are economically sound and rationalize some key decisions of the twentieth century such as General Electric and Line Material.

March 12, 2008 | Permalink | Comments (0) | TrackBack (0)

More Airline Price Fixing in Europe

Posted by D. Daniel Sokol

Today's WSJ reports that the European Commission has begun a price fixing probe into Europe-Japan airline routes.

March 12, 2008 | Permalink | Comments (0) | TrackBack (0)

Why Does Popcorn Cost So Much at the Movies? An Empirical Analysis of Metering Price Discrimination

Posted by D. Daniel Sokol

Wesley R. Hartmann of Stanford University - Graduate School of Business and Ricard Gil of the University of California, Santa Cruz ask and answer Why Does Popcorn Cost So Much at the Movies? An Empirical Analysis of Metering Price Discrimination.

ABSTRACT: Prices for goods such as blades for razors, ink for printers and concessions at movies are often set well above cost. This paper empirically analyzes concession sales data from a chain of Spanish theaters to demonstrate that high prices on concessions reflect a profitable price discrimination strategy often referred to as metering price discrimination. Concessions are found to be purchased in greater amounts by customers that place greater value on attending the theater. In other words, the intensity of demand for admission is metered by concession sales. This implies that while some consumers' surplus may be reduced by the high concession prices, surplus of other consumers on the margin of attending may increase from theaters' decisions to shift their margins away from movies and toward concessions.

March 12, 2008 | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 11, 2008

Intel Battles the European Commission

Posted by D. Daniel Sokol

Intel has begun the first day of a two day hearing before the European Commission on abuse of dominance.  No doubt, the Commission feels empowered by the Court of First Instance's Microsoft decision.

HT: Sarah Sandok Rabinovici

March 11, 2008 | Permalink | Comments (0) | TrackBack (0)

Question for Our Readers

Posted by D. Daniel Sokol

For those blog readers who take long flights, I will be traveling to the ICN Annual Conference in Kyoto next month.  A number of people have reocmmended compression socks to reduce the risk of deep vein thrombosis on the very long flight.  Does anyone have any experience with compression socks?  Are there particular brands that you can recommend or websites to buy them?   

March 11, 2008 | Permalink | Comments (0) | TrackBack (0)

Geographic Deregulation and Competition in the U.S. Banking Industry

Posted by D. Daniel Sokol

H. Semih Yildirim, York University - Atkinson School of Administrative Studies and Sunil Mohanty, University of St. Thomas - College of Business bring us Geographic Deregulation and Competition in the U.S. Banking Industry.

ABSTRACT: We examine the effects of geographic deregulation on state-level competition in U.S. banking markets over the period 1976-2005. The empirical results confirm that the U.S. banks in general operated under monopolistic competition during the period examined. After partitioning the sample based on bank size we find that the market competition for large banks in Delaware, Oregon, and Rhode Island can be characterized as monopolistic while small banks in Arizona and Massachusetts seem to have operated under the conditions of perfect competition. The removal of geographic restrictions appears to have very limited and non-uniform effect on state-level competitive conduct. There is some evidence that the U.S. banking industry might have actually experienced a less competitive behavior in recent years due to increased market power of larger banks.

March 11, 2008 | Permalink | Comments (0) | TrackBack (0)

The Challenges of Economic Proof in a Decentralized and Privatized European Competition Policy System: Lessons From the American Experience

Posted by D. Daniel Sokol

GavilAndrew Gavil of Howard Law School brings us another paper on private rights in the EU in his paper The Challenges of Economic Proof in a Decentralized and Privatized European Competition Policy System: Lessons From the American Experience.

ABSTRACT: Since the announcement in late 2002 of the Modernization Plan, and continuing in 2005 with the release of the Green Paper on damages actions, the European Commission has been committed to a significant restructuring of the EU's approach to enforcing competition laws. Under the revised system as envisioned by the Commission, national competition authorities and private parties will assume a far greater role in supplementing the work of the Commission, which for 50 years has been the predominant competition policy enforcer in Europe. The goal is not only to produce a system of shared enforcement authority, but to promote the continued evolution in Europe of a "culture of competition," while avoiding the creation of a "culture of litigation." If national competition authorities and private parties accept this invitation, however, they are likely to face the same kinds of demands for substantial economic evidence from their national courts that the EC has faced from the Court of First Instance and the European Court of Justice in some of its most complex and challenging recent cases. This paper asks whether national level enforcers, public and private, will have the procedural and evidentiary tools necessary to respond to demands for such economic proof. Drawing on the Commission's recent experiences, as well as lessons from the U.S. experience, it asks whether the Green Paper's treatment of economic evidence is adequate given the importance that economic proof plays today in competition law cases. It then urges the Commission to devote additional attention to identifying and advocating reforms that will more actively facilitate the disclosure, development, and presentation of economic evidence. This paper particularly questions the Green Paper's preference for the use of court-appointed experts in lieu of party-secured expert witnesses. It argues that party and court-appointed experts can perform very different functions in competition law cases and should not be viewed as substitutes. Moreover, it suggests that the Green Paper may significantly underestimate the degree to which party-secured expert economic witnesses will be necessary if national level enforcers—public and private—are to be adequately equipped to meet the burdens of proof they will face. If national enforcers systematically find that they lack the procedural tools necessary to develop the economic evidence they need to meet those burdens, they will reduce or abandon their efforts to initiate competition law actions and it will be less likely that the promise of decentralization and privatization can be realized.

March 11, 2008 | Permalink | Comments (0) | TrackBack (0)

Monday, March 10, 2008

FTC to Host Workshop on Innovations in Health Care Delivery

Posted by D. Daniel Sokol

According to an FTC press release:

  • The Federal Trade Commission will host a workshop on April 24, 2008, to examine recent trends related to health care delivery. This workshop will bring together representatives of physician and healthcare associations, industry, privacy groups, academia, federal and state government, and other experts.

The panelist information is not yet up but I am sure that it will be some of the top people in the field.

March 10, 2008 | Permalink | Comments (0) | TrackBack (0)

Article 82 EC: Where Do We Stand After the Microsoft Judgment?’

Posted by D. Daniel Sokol

In what will probably be a very interesting presentation, Bo Vesterdorf will speak on Article 82: Where Do We Stand After the Microsoft Judgment?’ for the annual Queen Mary University of London School of Law Annual Competition Law and Policy Lecture on March 12th.

March 10, 2008 | Permalink | Comments (0) | TrackBack (0)

Much Ado About Twombly? A Study on the Impact of Bell Atlantic Corp. v. Twombly on 12(B)(6) Motions

Posted by D. Daniel Sokol

In an interesting student note, Kendall Hannon of the Notre Dame Law School undertakes some empirical work in  Much Ado About Twombly? A Study on the Impact of Bell Atlantic Corp. v. Twombly on 12(B)(6) Motions.

Bell Atlantic Corp. v. Twombly has resulted in discussion and debate both in academic writings and in the courts. There exists a broad range of opinions as to what exactly this decision means for notice pleading and motions to dismiss in federal courts. This Note seeks to contribute to this ongoing debate by injecting empirical data.

This empirical study is built around reported federal district court cases. Every district court case citing Twombly in the context of a 12(b)(6) motion to dismiss was read and the disposition of the motion recorded. The rates of dismissal were then compared to numerous control groups- cases that cited Conley v. Gibson in the context of a 12(b)(6) motion to dismiss.

The conclusions suggest that Bell Atlantic may not be having a major impact on most areas of substantive law. However, it appears that Bell Atlantic is having a disproportionate impact on civil rights cases. These cases appear to be dismissed at a statistically higher rate under Bell Atlantic than they were under Conley. This Note proceeds in four parts. Part I provides context for the study by examining the important Supreme Court precedents both before and after Bell Atlantic as well as the response to Bell Atlantic in the legal literature. Part II discusses the methodology of the empirical study, while Part III presents the findings of the study in a variety of ways. Finally, Part IV seeks to advance various hypotheses that could each serve to explain the findings encountered in the study.

March 10, 2008 | Permalink | Comments (0) | TrackBack (0)

Sunday, March 9, 2008

Foxes in the Henhouse: FCC Regulation through Merger Review

Posted by D. Daniel Sokol

Public choice concerns go hand in hand with issues of regulation.  Though antitrust is not immune from public choice, it is far less likely to be guided in its decision-making by such concerns than sector regulation, where interests are more concentrated and therefore more prone to capture.  In a new paper, Greg Sidak and Hal Singer (both of Criterion Economics) argue to reduce the power of the FCC to condition merger approval based on its public interest rational (which may in fact not be in the public's interest) in their article Foxes in the Henhouse: FCC Regulation through Merger Review.

ABSTRACT: Although the Department of Justice and the Federal Trade Commission (FTC) review proposed mergers, in mergers involving communications businesses the Federal Communications Commission (FCC) decides whether it would serve the public interest for the acquired firm to transfer its operating licenses to the acquiring firm. This public-interest discretion has become problematic because the FCC has repeatedly set conditions for merger approval that satisfy private pressure groups with economic or social agendas, yet are irrelevant to defending consumers from the consequences of increased market power.

A current example of this phenomenon is the proposed merger of XM and Sirius, the only two satellite radio companies holding FCC licenses for radio spectrum. The firms have an incentive to accept costly new regulation-for example, a requirement that the combined systems set aside channels for educational programming or offer programming on an à-la-carte basis-as the price of merger approval. Such concessions, however, are not relevant to the antitrust laws, where the concern is whether the merger will create monopoly power. Redistributing income to influential political constituencies does nothing to answer the question of whether the merger will harm consumers, who form the constituency that should matter most to the FCC.

Congress should remove the FCC's power to impose conduct remedies as a condition of approving a merger. Alternatively, Congress should require that the Tunney Act apply to conduct remedies imposed by the FCC in mergers, such that a federal district court would independently review whether merger conditions adequately addressed the specific harm to competition that the FCC alleged in the merger order.



March 9, 2008 | Permalink | Comments (0) | TrackBack (0)